Here’s how a 5% mortgage rate would roil the US housing market

Mortgage rates are now at their highest level in four years and poised to move even higher. The timing couldn’t be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale.

Add it all up, and affordability is starting to hurt.

The average rate on the popular 30-year fixed is now right around 4.50 percent, still low when looking historically, but buyers over the past six years have gotten more used to rates in the 3 percent range. Mortgage rates have not been at 5 percent since 2011.

A 5 percent rate would cause more than a quarter of today’s homebuyers to slow their plans, according to a Redfin survey of 4,000 consumers at the end of last year. Just 6 percent said they would drop their plans to buy altogether. About one-fifth of consumers said 5 percent rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home.

Despite rate concerns, the bigger issue for buyers is changes to tax laws that had lowered the…

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Will the stock market shakeup affect mortgage rates and home sales?
The Stock Market Shakeup and Home Sales Since then the market has continued to be turbulent.
Then, President Trump's tariffs announcement made it drop 420 points on March 1.
So how does the recent shakeup affect you if you’re thinking about buying or selling a home?
When the yield on these notes increases, mortgage rates increase.
On a $250,000 mortgage that’s $70 per month ($840 per year).
But as interest rates rise, you could find yourself facing a monthly payment similar to what you would have with higher home prices and lower interest rates.
It might be a good time to buy a home before rates increase any further, but only if you’re otherwise ready and only if you find a home you will be happy living in for years.
Mortgage rates are still relatively low, making it a good time to take out a home loan.
Short-term stock market shakeups should not be a factor in home buying or selling decisions.

TruVest, is a national real estate investment company that challenges the conventional investment community to think differently about atypical investments in green technology and real estate notes.
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